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Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2011
Summary of Significant Accounting Policies [Abstract] 
Summary of Significant Accounting Policies
Note 3—Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission (“SEC”). The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or full year.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes. In addition, management’s assessment of the Successor Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Actual results may differ materially from those estimates.
Inventory
Inventories are determined at the lower of cost or market value with cost determined under specific identification and on the first-in-first-out method. Inventories consist of raw materials and finished goods. We began capitalizing raw material inventory in August 2011 in preparation for our LAVIV product launch. Costs incurred prior to August 2011 have been recorded as research and development expense in our statement of operations.
Income (loss) per share data
Basic income (loss) per share is calculated based on the weighted average common shares outstanding during the period. Diluted income per share (“Diluted EPS’) also gives effect to the dilutive effect of stock options, warrants, restricted stock and convertible preferred stock calculated based on the treasury stock method. The following table presents computations of net income (loss) per share.
                                 
    For the three months     For the nine months ended  
    ended September 30,     September 30,  
    2011     2010     2011     2010  
Numerator for basic and diluted net income (loss) per share-net income (loss) attributable to common shareholders
  $ 6,916,857     $ (1,821,905 )   $ (20,293,605 )   $ (8,281,245 )
 
                       
 
                               
Denominator for basic net income (loss) per share-net income (loss) attributable to common shareholders
    69,863,597       19,557,842       51,219,473       18,291,301  
 
                       
Effect of dilutive securities:
                               
Convertible preferred stock
    7,682,000       —       —       —  
Warrants
    6,126,194       —       —       —  
 
                       
Diluted potential common shares
    13,808,194       —       —       —  
 
                               
Denominator for diluted net income (loss) per share-net income (loss) attributable to common shareholders
    83,671,791       19,557,842       51,219,473       18,291,301  
 
                       
Basic net income (loss) attributable to common shareholders per common share
  $ 0.10     $ (0.09) )   $ (0.40 )   $ (0.45 )
 
                       
Diluted net income (loss) attributable to common shareholders per common share
  $ 0.08     $ (0.09) )   $ (0.40 )   $ (0.45 )
 
                       
The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as of September 30, 2011 and 2010, as they would be anti-dilutive:
                                 
    For the three months     For the nine months ended  
    ended September 30,     September 30,  
    2011     2010     2011     2010  
Shares of convertible preferred stock
    —       9,058,333       7,682,000       9,058,333  
Shares underlying options outstanding
    13,655,000       5,677,000       13,655,000       5,677,000  
Shares underlying warrants outstanding
    14,646,021       18,218,146       49,135,602       18,218,146  
Unvested restricted stock
    —       150,000       —       150,000  
Recent Accounting Pronouncements
In September 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”), which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. Instead, the Company must report comprehensive income in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after December 15, 2011 with early adoption permitted. The adoption of ASU 2011-05 will not have an impact on the Company’s consolidated financial statements as it only requires a change in the format of the current presentation.